PLIs boosted manufacturing, job creation, exports: Govt

Production-linked incentive (PLI) schemes have led to a significant increase in production, employment generation, economic growth, and exports in the country, the government said today.

Addressing a press conference in New Delhi, Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh said that PLI schemes caused “a significant increase of 76 per cent” in foreign direct investment (FDI) in the manufacturing sector in 2021-22 ($21.34 billion), as compared to previous 2020-21 ($12.09 billion), an official press release said.

PLI schemes, envisioned with the objective of making India self-reliant (Aatmanirbhar), is built on the foundation of 14 sectors with an incentive outlay of Rs 1.97 lakh crore (about $26 billion) to strengthen their production capabilities and help create global champions.

Sectors for which PLI schemes exist and saw an increase in FDI inflows from 2021-22 to 2022-23 are drugs and pharmaceuticals (46 per cent), food processing industries (26 per cent), and medical appliances (91 per cent).

PLI schemes have transformed India’s exports basket from traditional commodities to high value-added products such as electronics & telecommunication goods and processed food products, the release said.

As on date, 733 applications have been approved in 14 sectors with expected investment of Rs.3.65 lakh crore. As many as 176 micro, small and medium enterprises (MSMEs) are among the PLI beneficiaries in sectors such as bulk drugs, medical devices, pharmaceuticals, telecom, white goods, food processing, textiles, and drones.

Actual investment of Rs 62,500 crore was been realized till March 2023 which resulted in incremental production/sales over Rs 6.75 lakh crore and employment generation of around 325,000. Exports got boosted by Rs 2.56 lakh crore till 2022-23.

Incentive amount of around Rs 2,900 crore was disbursed in 2022-23 under PLI schemes for eight Sectors—large-scale electronics manufacturing (LSEM), IT hardware, bulk drugs, medical devices, pharmaceuticals, telecom & networking products, food processing, and drones & drone components.

PLI schemes have led to major smartphone companies shifting its suppliers to India—e.g., Foxconn, Wistron, and Pegatron. As a result, top high-end phones are being manufactured in India. It has also resulted in a 20-fold increase in women employment and localization in IT hardware such as battery & laptops.

Singh said that the value addition in mobile manufacturing in India is to the tune of 20 per cent. “We have been able to increase the value addition in mobile manufacturing to 20 per cent within a period of three years, whereas countries like Vietnam achieved 18 per cent value addition over 15 years and China achieved 49 per cent value addition in over 25 years. Seen in this perspective, it is a big achievement.”

The PLI scheme for LSEM, along with existing the Phased Manufacturing Program (PMP), has led to increased value addition in the electronics sector and in smartphone manufacturing, 23 per cent and 20 per cent, respectively, from negligible in 2014-15. Of the $101 billion total electronics production in 2022-23, smartphones constitute $44 billion, including $11.1 billion as exports.

Import substitution of 60 per cent has been achieved in the telecom sector, the release said. India has become “almost self–reliant” in antennae, GPON (Gigabit Passive Optical Network) & CPE (Customer Premises Equipment). The drones sector has seen a seven times jump in turnover due to the PLI scheme which consists of all MSME startups.

Under the PLI scheme for food processing, sourcing of raw materials from India has seen significant increase which has positively impacted income of Indian farmers and MSMEs.

Due to the PLI Scheme, there has been a significant reduction in imports of raw materials in the pharmaceutical sector. Unique intermediate materials and bulk drugs are being manufactured in India including Penicillin-G, and transfer of technology has happened in manufacturing of medical devices such as CT scan and MRI.